Managing investment accounts in PocketSmith

Add your investment accounts to PocketSmith for a complete picture of your financial position 💰📈
Investment accounts are a bit different from regular accounts as, in addition to regular transactions, their balances are also affected by growth or loss which is usually not represented by transactions. Due to the way balances are calculated in PocketSmith, this can cause issues with tracking historic balances.
In this guide, we'll look at the best options for adding and managing your investment accounts, and how to account for any growth or loss. 
In this user guide

The difference between regular bank accounts and investment accounts in PocketSmith

Investment accounts are different from regular transactional accounts as, in addition to regular contributions (and possibly withdrawals), your investment balance is also affected by growth or loss, often not reflected by transactions. 

Because PocketSmith calculates historic balances for bank feed accounts using transaction data, adding your investment account as a transactional account will mean that your historic balances are inaccurate. 

However, if your investment account has a bank feed available, you can get around this by using our track balance changes feature. If no bank feed is available, it's best to add the account as an Asset. 

Retirement funds

If you're looking to add a retirement fund, or employer-sponsored investment fund, where your contributions are deducted from your paycheck, you'll need to use a slightly different approach for managing and tracking contributions.

For detail on how to manage employer-sponsored funds, please see: Tracking your retirement fund in PocketSmith


Options for adding your investment accounts to PocketSmith

There are two ways that an investment account can be added to PocketSmith:

  • As a bank feed account (if available)
  • As an asset

We've compiled a brief overview of both options below. Read on to learn more.

Adding your investment fund as a bank feed account, using the 'track balance changes' feature

If a bank feed is available, we recommend adding your investment account as a bank feed account, with the 'track balance changes' option enabled. 

The advantages of adding your investment account as a bank feed account include:

  • the current balance of the fund will always be up to date
  • ability to track balance history
  • transactions within the account are automatically imported

Adding your investment account as an asset

If no bank feed is available for your investment account, then it's best to add it as an asset. 

This option may also be suitable for you if you would like your investment account included in your net worth and you want to forecast its growth, but you don't want to report on the gains or losses as part of your Income & Expense Statement, or don't want the transactions from the account cluttering up your day-to-day income and expenses.

  • no need to add or import transactions, and therefore no need to worry about how they will affect your income & expense reporting
  • use a repeating budget to reflect your contributions. The budget will automatically update the asset balance accordingly.

Please note that balance adjustments reflecting any gains or losses will need to be added periodically in order to keep the balance up to date.


Managing your investment account as a bank feed account, using the 'track balance changes' option

Adding a bank feed account

If bank feed support is available for your investment account, and you decide you would like to add it to your PocketSmith as a bank feed account, then you can learn how to do this here: Adding a bank feed and establishing your accounts

How to activate the 'track balance changes' option

Enabling the ' track balance changes' option will allow you to track historic balances for accounts where no transactions are imported, or for investment accounts where the balance is also affected by gains and losses

With 'track balance changes' enabled, when the balance changes, a balance record is created and saved in the forecast calendar. These records will be used when displaying the historical balances for this account.

To enable the 'track balance changes' option:

1
Head to the Account Summary ( Manage > Account Summary)
2
Navigate to bank account that you want to change the preferences for, click MANAGE ACCOUNT , then click  Other settings
3
Tick Track balance changes for this account, then click SAVE
'Track balance changes' is now enabled! 🙌 

Categorizing your transactions

Once your account has been added and the transactions imported, you'll need to determine how you'd like to report on the transactions and categorize them accordingly. 

Since your contributions to your investment accounts are transfer transactions, we generally recommend you assign these to a transfer category. You can learn how to create a transfer category here: Steps to create a transfer category.

Budgeting & forecasting

Add a repeating transfer budget from your main account to your investment account in order to reflect your regular contributions and include them in both accounts' forecasts.

For more detail on creating a budget please see: Creating a transfer budget

Accounting for gains/losses

Often, gains and losses are not recorded as transactions within an investment account, however, with the 'track balance changes' option enabled, your balance history, including gains and losses, will be saved on the Calendar. 


Managing your investment account as an asset

Adding an asset

If you decide that you'd like to add your investment account as an asset, you can learn how to do this here: Adding an asset to Net Worth

Tracking your contributions using a transfer budget

Once the asset has been added, you're able to add a repeating transfer budget to reflect any contributions made from your Main account to your Investment account. The budget events will automatically update your asset balance accordingly, as well as include the budget events in both accounts' forecasts

To do this, you'll need to create a new category, eg. Investment contributions. It's best to set this category up as a transfer category.

Next, you'll need to create a transfer budget for your Investment contributions category, reflecting the transfer from your 'Main account' to your 'Investment account'.

For detail on how to do this please see: Setting up a transfer budget for an asset

Updating the asset balance to account for gains/losses

In order to account for any gains or losses to your investment account, you'll need to periodically add a manual balance adjustment as outlined here: Updating the value of an asset or liability from the Calendar page


Adding your share portfolio to PocketSmith

If you have a range of investment accounts in a share portfolio, and just want to include the portfolio balance in your PocketSmith account in order to include this in your overall net worth, we recommend adding your share portfolio as an asset.

You can use a transfer budget to reflect any regular contributions toward your portfolio.

To account for growth or loss, you'll need to update the balance of the asset periodically. We've got all the detail on how to do this here:  Updating the value of an asset or liability from the Calendar page.

Note

Please note that PocketSmith does not have a detailed share tracking feature. If you want detailed share tracking we suggest using a dedicated provider, such as Sharesight.

You can then add your portfolio balance to PocketSmith as an asset as detailed above.

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